Tennessee Governor requests nearly $100M for energy innovation in proposed spending plan

On Feb. 10, Tennessee Gov. Bill Lee presented his 2025 State of the State address along with his FY 2025-2026 budget proposal and legislative agenda. Building on the theme of both his speech and agenda, “Tennessee innovates,” Lee seeks to position the Volunteer State as the epicenter of energy innovation, especially nuclear power.

Over the past several years, the governor has presented a vision for Tennessee to lead the nation on nuclear energy initiatives and expand the state’s leadership in “the nuclear energy ecosystem.” In 2023, Tennessee established a Nuclear Energy Advisory Council through an executive order that was tasked to provide the administration with recommendations and guidance to advance the Volunteer State’s nuclear energy innovations and investment. Additionally, the state’s FY 2023-2024 approved budget funded the administration’s $50 million Nuclear Energy Fund to support nuclear power-related businesses and education/training programs across Tennessee. To date, the state has approved $13.5 million in grants, primarily to state universities, within that fund.

In this year’s address and budget, the governor proposed several funding recommendations and new initiatives to further the state’s development of and accomplishments in its nuclear energy research and innovation. Proposals include:

• $50 million to create the Small Modular Reactor (SMR) Grant Fund to support the Tennessee Valley Authority’s Clinch River Nuclear SMR project, which aims to position Tennessee as “a leader in next-generation nuclear energy;”
• $10 million to the Nuclear Energy Fund to attract advanced nuclear technology companies and industry initiatives;
• $10 million in funding to the Governor’s Investment in Vocational Education (GIVE) to support nuclear workforce education, as recommended by the state’s Nuclear Energy Advisory Council;
• $2.6 million to develop/establish a regulatory framework for commercial nuclear fusion power; and
• $20 million for the Federal Grant Matching Fund, to support proposals from Tennessee universities and businesses applying for research funding from federal agencies like the National Science Foundation (NSF) and Department of Energy (DoE).

As part of Lee’s overall economic opportunity and workforce development agenda for Tennessee, he is also proposing:

• $45.8 million for a Rural Development Grant Fund to enhance the state’s rural and distressed communities through site development, community asset improvements, strategic planning and downtown revitalization;
• $25 million for the Tennessee FastTrack program, which offers grants to recruit new business to the state and support workforce development;
• $25 million to expand the RevV Program, the state’s manufacturing voucher program to connect private companies with Tennessee’s research institutions to drive research and development and job creation;
• $10 million for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Matching Funds to match federal funds assisting Tennessee startups in securing competitive research and development grants.
• $6.3 million to create a statewide Micro-Credentialing Program to develop short-term, targeted certifications - equipping Tennesseans with high-demand skills identified by industry and state partners; and
• $2.27 million to develop the Tennessee Board of Regents’ Center for Workforce Development to expand workforce training for businesses and industries, including specialized onboarding and apprenticeship programs, in partnership with TN Accelerates.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. (The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.